Share 
Minnesota has cleared its first major hurdle in banning prediction markets, and now it’s up against an evenly split House and the legislative clock.
On April 30, the Minnesota State Senate passed legislation banning most prediction market bets in a bipartisan 56-10 vote.
The legislation now heads over to the House chamber, where it faces an uncertain future due to an even 67-67 Democratic-Republican split, and a session that ends on May 18.
Bill garners bipartisan support
Twenty-two Republicans crossed the aisle to join Democrats in support of SF 4511, showcasing the bipartisan popularity of banning prediction markets.
Senator John Marty (D-Roseville) cited concerns of unregulated gambling and insider trading as his reasons for getting behind the bill.
“It shows that people of both parties, people who are pro-gambling and anti-gambling, together can recognize that the prediction markets are ripe for conflict of interest, things from insider trading for politicians, for others. It’s a huge thing ripe for scandal. And it’s gone out of control.”
If it passes the House as written, SF 4511 would make it a felony in Minnesota to create, operate, or facilitate a prediction platform in the state. Advertising or marketing such platforms would also be a felony. The proposed bill would go into effect on Aug. 1 if signed into law by Gov. Tim Walz.
An interesting angle emerged last week when the co-author of the bill was suspended by Kalshi for betting on his own race. In October, Sen. Matt Klein (DFL-Mendota Heights) placed a $50 wager on his campaign for Minnesota’s 2nd Congressional District, which was flagged by Kalshi. He was fined $539.85 and suspended from the prediction platform for five years.
Klein has stated that curiosity led him to place the wager, and that his personal experience “points to the need for clearer rules and regulations on these types of markets.” He voted in support of SF 4511.
House Republicans fear federal blowback
The federal government has rigorously defended its jurisdictional authority to oversee prediction markets, with the Commodity and Futures Trade Commission (CFTC) recently filing lawsuits against Illinois, Connecticut, and Arizona.
The CFTC’s willingness to litigate its regulatory authority has given some Republican House members like Rep. Harry Niska pause, with fears of legal blowback top-of-mind,
“I’m concerned about the sort of legal status of that. How do we do that with federal commodities laws, which apparently the [US Commodity Futures Trading Commission] thinks that they have exclusive jurisdiction over prediction markets.”
Along with the potential for passage in the House, the bill sits up against a ticking clock on the legislative session. The House will gavel out in just over a week.
